A significant drop in the number of students taking the secondary school public exam has forced the exam authority to ask the government for more funding as its financial reserves will dry up by 2021.
The Examinations and Assessment Authority is an independent statutory body that mainly finances itself by charging those who sit the Hong Kong Diploma of Secondary Education (DSE) exam. They have been operating at a loss for two years.
Only 61,669 sat the university entrance test this year – down 25 per cent from the 82,350 who took it in 2013.
Authority chairman Rock Chen Chung-nin said he was expecting to meet the new education minister, Kevin Yeung Yun-hung, soon to discuss funding.
The authority has had to dig into its accumulated surplus, which stood at HK$211 million in August 2016, as its annual deficit worsened from around HK$6 million in 2015 to HK$19.7 million last year.
Chen predicted the reserves would be used up by 2020-21, when the number of DSE takers would hit a low of about 45,000.
Since last year, the authority has increased exam fees, which account for about half of its yearly income, by 4 per cent. For language subjects it will rise next year by HK$24 to HK$619, while the fee for other subjects will increase by HK$16 to HK$414.
It has also taken cost-cutting measures, such as borrowing classrooms from public schools instead of renting space in commercial buildings for evaluation centres. But Chen said this had not helped much because up to 70 per cent of the cost for exam preparation was fixed and fewer students were paying.
Chen said the authority would not cover costs solely by increasing fees as “the number will be too big even for us to accept”.
While declining to specify how much funding the authority needed, Chen said he would come up with at least three to five scenarios for talks with the government.
Discussion would include whether the government should share the losses from hosting the DSE exams and at what pace fees should be increased.
The Education Bureau said it would take the authority’s financial status into account when setting the DSE fee, adding the authority was expected to boost income and reduce expenses.